Question

Ace Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows:
Engine parts ............... $325,000
Shop direct labor ............. 296,000
Shop and repair equipment depreciation ..... 18,000
Shop supervisor salaries .......... 110,000
Shop property taxes ............. 20,500
Shop supplies ............... 7,500
Advertising expense ............. 30,000
Administrative office salaries .......... 75,000
Administrative office depreciation expense .... 8,000
Total costs and expenses .......... $890,000

The average shop direct labor rate is $18.50 per hour. Determine the predetermined shop overhead rate per direct labor hour.



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  • CreatedFebruary 04, 2014
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